Plus: Semiconductor Executives Forecast 2011 Sales, Manufacturing Tech Consumption Dips and New Jobless Claims Drop.

U.S. Trade Gap Narrows in October
The United States trade deficit narrowed to $38.7 billion in October, a 13.2 percent decrease from the revised total of $44.6 billion in September, according to the U.S. Department of Commerce on Friday. The improvement was largely due to higher overseas demand for U.S. goods. October exports rose by $4.9 billion to $158.7 billion, while imports fell $0.9 billion to $197.4 billion.

In October, the goods deficit dropped to $51.4 billion, down $5.7 billion from September, while the services surplus increased $0.2 billion to $12.7 billion. Goods exports increased $4.5 billion to total $112.3 billion, led by industrial supplies and materials, foods and beverages and automotive vehicles, parts and engines. Goods imports fell $1.2 billion to $163.7 billion, due to decreased imports of industrial supplies and materials, capital goods and foods and beverages.

“The October improvement in the trade balance was much better than the average analyst forecast of a rise to $44.5 billion from the initial September estimate of $44 billion,” Agence France-Presse reports. “Exports, which President Barack Obama has pledged to double by 2015 to support the recovery, increased 3.2 percent from September, while imports fell 0.5 percent.”

October marked the second consecutive month that the U.S. trade deficit narrowed. The latest decrease made it the smallest trade gap since January, while exports rose to their highest level since August 2008, the month before the financial crisis struck.

“U.S. trade had been a drag on growth earlier this year, as imports picked up, in part from companies rebuilding inventories in the U.S,” the Wall Street Journal explains. “Now, U.S. companies appear to be benefiting more from the strong growth abroad, particularly outside the developed economies that have struggled alongside the U.S.”

Semiconductor Executives Confident in 2011 Outlook
Semiconductor executives expect to see solid increases in both sales and workforce growth in 2011, despite the uneven economic recovery, according to a global survey conducted by U.S. audit, tax and advisory firm KPMG LLP.

The survey, conducted in collaboration with the Semiconductor Industry Association, found that 78 percent of semiconductor executives expect revenue to grow by more than 5 percent next year; 39 percent of industry execs expect their company’s semiconductor revenue to increase by 10 percent or more in the next fiscal year.

Survey respondents identified the top drivers of revenue growth for 2011: wireless handsets and other wireless communications devices (68 percent); consumer products (65 percent); and computing (55 percent). More executives also believe industrial products (43 percent) and automotive products (38 percent) will be important revenue drivers over the next year.

Meanwhile, 29 percent of respondents forecast workforce growth of greater than 5 percent, up from 23 percent in 2009 and 17 percent in 2008, reflecting increased confidence in the resilient semiconductor industry.

“Our findings show an industry that expects moderate growth next year, which is extraordinary in the context of an uneven global economic recovery,” Gary Matuszak, KPMG Global Chair for the Information, Communication and Entertainment practice, said in a statement. “The continuing demand for electronic products ranging from tablets to smartphones, and an increased demand for technology integration in automobiles will buoy semiconductor manufacturers as the economy fluctuates.”

However, 53 percent of respondents anticipate the semiconductor cycle will peak within the next 12 months.

Manufacturing Tech Consumption up Year-Over-Year
The total value of U.S. manufacturers’ machine tool and related equipment consumption dropped to $387.13 million in October, down 2.5 percent from September, according to the latest U.S. Manufacturing Technology Consumption report, released by the American Machine Tool Distributors’ Association and the Association for Manufacturing Technology (AMT).

Nonetheless, the total for October 2010 was up 154.9 percent over the $151.86 million reported for October 2009.

“Never in the history of the USMTC have we seen a post-IMTS October rival September so closely,” AMT President Douglas K. Woods said in an announcement of the findings. “Increased Sec. 179 expensing and 50 percent bonus depreciation enacted in late September helped offset the declines we normally see after a show. Looking ahead, enactment of the pending tax package would give U.S. manufacturers a big boost heading into the New Year.”

With a year-to-date total of $2.48 billion, 2010 is up 83.2 percent compared with 2009.

Weekly Jobless Claims Continue to Decline
New initial jobless claims fell steeply in the latest week reported. According to the U.S. Department of Labor on Thursday, seasonally adjusted unemployment claims decreased by 17,000 for the week ending Dec. 4, bringing the total to 421,000, down from the previous week’s revised total of 438,000.

“The surprisingly small gain in employment last month had blurred the labor market picture and the bigger-than-expected drop in new claims should strengthen perceptions a durable recovery is under way,” Reuters reports.

The four-week moving average, which is intended to smooth out volatility in the data, fell 4,000 to 427,500, its lowest level since Aug. 2, 2008. The latest reporting period marked the fifth consecutive week of declines in the four-week moving average.

Despite the positive weekly jobless claims figures, the overall unemployment rate rose to 9.8 percent in November, after lingering at 9.6 percent for the prior three months.

“Initial jobless claims reflect weekly firings and tend to fall as job growth — measured by the monthly non-farm payrolls report — accelerates,” Bloomberg News explains. “That relationship has broken down in recent months as some companies cut staff and others expand — pointing to an uneven recovery.”